Stephen Lowisz: We have some new faces, which is great. So first of all, thanks for coming to the third Automation Trends Roundtable. There's going to be some people filtering in as time goes on. We’re another right now. If you guys don't mind – if you haven't seen the previous recordings to the last couple roundtables, we do like to do quick introductions and kind of set the frame here. Steven Lowisz here, I run Sales and Marketing at Roots Automation. Dubanshu – I want to make sure I say that properly. Do you want to introduce yourself first? You’re first on my screen.
Participant: Oh, sure. My name is Dubanshu Debroy, I currently work for Prudential, but I'm actually in transition. So I would be presenting independently not representing any company. My focus is on operations transformation, focusing mostly on contact center, back office and shared services domain where I do business process improvement, automation, opportunity assessment and developing business case and roadmap for the organization.
Stephen Lowisz: Wonderful. Well, great to meet you. Bob Gilpin, I do know you, but [introduce yourself] for everybody else here.
Participant: Good morning, Bob Gilpin. I'm a Senior VP of Marketing for the Eastern Alliance Insurance Group. We're a specialty writer of workers compensation products and services.
Stephen Lowisz: Welcome. Catherine, You're next on my screen.
Participant: Hi there, Catherine Christian. I'm from Allied World. I work on Janet's team. I'm VP of Business Operations for North American underwriting. And pleasure to be here. Thank you.
Stephen Lowisz: Glad to have you, and Janet.
Participant: Hi, I'm Janet Moylan. And I run North American Underwriting Operations for Allied World Assurance Company.
Stephen Lowisz: Great to have you up, Pete.
Participant: Hey, Pete Koltis here, partner at Alvarez and Marsal, which is an advisory firm for those of you don't know us. We have been doing work with Roots Automation, Stephen asked me to attend and I was happy to. I think I registered and then you asked me to participate. So either way, chicken or egg. So happy to be here with you guys. And you know, open have a discussion and share stories.
Stephen Lowisz: That means our marketing's working if you are going to join before I asked. So I'll take it. Bob, is it Bob Tuccillo?
Participant: Yes, it's Bob Tuccillo. Thanks, Stephen. So I'm a senior advisor at a company called Castro and Company. We're a CPA firm. We do audits and advisory services.
Stephen Lowisz: Perfect. Thank you. Last one, Austin, and then we get to the to the main guy, man of the hour.
Austin Frahler: Oh, hi, everyone. My name is Austin Frahler and I’m the Account Executive here for Roots Automation. I started about a week and a half ago. So, still new to the team. But prior to Roots, I was with IBM for four years selling into Financial Services. And then prior to that I was nine years in the insurance industry. So good to be on the call with everyone today.
Stephen Lowisz: I promise you will not get a call from Austin afterwards. I will throw that disclaimer out here right from the onset… nor myself for the record. With that being said… Kartik, before we get to you, the man of the hour here, I again wanted to thank all of you guys for joining the third Automation Trends Round table. This one is pretty interesting for us. So Kartik, who will get into his background in a second, is the CIO at LIMRA – which, those of you in insurance are probably more than familiar with. You know, he has a unique perspective, which is why we asked him to join when we're talking about a transgenerational workforce.
And, you know, we know that we need automation. I'm not gonna sit here and try to sell people on [whether] we need automation. You're at an automation roundtable, for what that's worth. So I'll skip over that. But how do you deal with different perspectives from different generations? You can't group the whole workforce into just one bucket and say, “Okay, here's how we're going to attack it.”
So although a CIO, I think he has a very unique perspective for some business cases, and how to approach change management, etc. So with that, Kartik, how about you introduce yourself and how do we have the pleasure of speaking with you?
Kartik Sakthivel: Yeah, thank you. Thank you, Stephen. And if I don't get the chance after, I wish you and Rachel the very best with your new baby. So, thank you for having me. I don't know about being the man of the hour. I'm just happy to be part of this esteemed panel. My name is Karthik Sakthivel. Coming to you live from sunny Dover, New Hampshire, which is the New Hampshire seacoast. I have the pleasure and the honor of serving as Vice President and Chief Information Officer for LIMRA/LOMA LL Global. We are the world's largest and oldest not for profit, non advocacy, insurance industry trade association. We are focused on life insurance and annuities, group and worksite benefits, and retirement.
Stephen Lowisz: Appreciate the intro. So I guess the first question that I have for you card ticket… and by the way, again, if you haven't seen these previous recordings from the last two events for everybody on here, this is meant to be a roundtable. Yes, I have a bunch of questions I'm going to pepper Kartik with, but it's also a free for all. So I'm going to pick on you. You guys can ask each other questions, etc. Please don't take this as a webinar. We did one yesterday, it’s not nearly as fun as our more engaging setup here. You know, Kartik, can you explain first what shifts you’re seeing take place in today's workforce? And why do you think it's specifically a relevant conversation today, pertaining to the financial services industry?
Kartik Sakthivel: Yeah, thank you. Great question, Stephen. So for those of you who are in insurance broadly, and financial services even more broadly, I think I'm preaching to the choir when I say the insurance industry in totally has been about three to five years behind in terms of embracing digitization and digital transformation behind retail banking. Even within insurance, I think property and casualty is about three to five years ahead of where life insurance is, right? So, the trend accelerated globally and has been accelerating and compounding over the past several years. And I think what happened in 2020… look, COVID has been horrible right now with that with the loss of life, with financial calamity, disruption of what we do. But it has also hyper accelerated digital transformations that were already accelerating across industries to begin with, right?
We did some work here LIMRA / LOMA / LL Global, partnering with McKinsey and Company to try and understand the COVID effect on all these ongoing digital transformations. And COVID just hyper accelerated all of these programs, especially when it comes to things that are customer focused, right? Like the CX from delivering systems of engagement, and that captivating engagement of the work that that companies are doing, to making it a frictionless and lucid experience to hyper personalization, right? So all of these things, just basically snowballed things that were scheduled for companies and 2024 or 2025 got thrust into 2021 and 2022 roadmaps. So the shifting nature of digitization, Stephen, I think, also creates unique opportunities for us, right in terms of looking at our talent, across the insurance, and financial services landscape.
If you have rote operational tasks that people are doing all day, every day, singularly, it's an opportunity for us to transform those tasks such that it can feed into the holistic digital transformation, such that you can deliver on exemplary customer experience and fulfill the promise of insurance, right? So I think the challenge and the opportunity for us is to understand how these automation opportunities allow us to focus on our employees on our talent across the spectrum to talk about skilling, upskilling, and reskilling. I think there's a huge opportunity for us to think about how we have this transmodal workforce, take their intellectual capital, and then pivot that ever so slightly into trying to figure out what's next. Right? What's coming up next?
Stephen Lowisz: Really appreciate the response. I mentioned at the beginning the ‘transgenerational workforce,’ which is something that you've previously talked about. Can you explain a little bit about what that is? And more importantly, why that's important?
Kartik Sakthivel: Yeah, I mean, it's a fascinating problem. And I think it's our generation’s problem. I don't believe this planet has encountered this transmodality of the workforce before, right? So currently co-habiting in our workforce today, regardless of industry, vertical, you have boomers, you have Gen X, you have millennials, and you have Generation Z, right? So I mean, think about the experiences that these four generations have had. They are vastly, vastly, vastly different in terms of operating styles, in terms of work culture, and then you throw digitization on top of that, and it's a completely different ballgame. So for example, now we're talking about Gen X, right? So I'm on the cusp between Gen X and millennials, right. So I went to school and in the mid to late 90s, I went to school for computer science before the internet was ubiquitous, right. And, you know, I adopted because of my vocation I got… sometimes I feel like I caught that cresting wave because now technology and digitization became a thing. And I was like, hey, that's my line of work. This is really cool.
But if you think about Generation Z, right, you're talking about folks who are between like, nine and 19 years old today, right? They are part of our workforce, they are new entrants into the workforce. This is a generation that has had access to smartphones since elementary school, right? So how do you have this workforce into your totality of your company's spectrum? When you have millennials, Gen X, when you have boomers who've had to go up and adopt technology and digitization as part of their job. Maybe at some point in their careers, their professions got disrupted, but augmented because of digital, right? So how do you bring these disparate perspectives and point of views together? I think that's a fascinating problem for us to examine.
Stephen Lowisz: So I think, again, we can skip over that, “Hey, let's go sell everybody on why automation is important.” It's an easy business case. But from an employee's perspective, ground level – How should they think about it? And what should somebody on the ground floor really see as the benefit of automation to them? Not the “Oh, crap, I'm being automated out of my job?”
Kartik Sakthivel: Yeah, good question. So I don't see automation… And again, everybody's lens is going to be slightly different, right? First off, I think companies need to recognize that, that's the whole part of building empathy with your employees, right? But by and large, if I'm an employee, whether I'm an actuarial, or underwriting or claims, or any of the functions of insurance, right… I have an opportunity to bring in automation, either champion it, or be a part of these massive automation initiatives to offset or to delegate some of these rote manual operational tasks that I do day in and day out.
I'm a smart human being, right? I need to think greater thoughts. So the more things I can push off to automation, and then provide my thought leadership because I have 10, 15, 20, or 25 years worth of experience with the subject matter. And I can provide my thought leadership into the overall process. I think that's an incredibly, incredibly powerful opportunity and a position that I find myself in, right? And last but not least, I think, all human beings – and I fundamentally believe this – even though some of us might not intentionally pursue it, we thrive on learning, right? Like, we are learning creatures. And you know, some of us embrace that continual learning mindset. Others learn by osmosis or organically. But the more I delegate these operational rote tasks, Stephen, I think it just frees up time for me to learn something new, right? Not do something else potentially, but learn something new and take that and apply it to my firm and my organization.
Stephen Lowsiz: Here's an interesting question. What matters more: the automation itself, or how it's rolled out?
Kartik Sakthivel: That's an interesting question. I think it's both, right? So I see technology as the enabler. Technology is the enabler, right? And the deployment of the technology is not just a change in process or the implementation of a new platform. It's a cultural change, right? And I think organizations get wrapped up, you listen to people like me in IT, and we go, “Yeah, let's focus on the next upgrade. Let's focus on modernization, let's focus on digitization.” But the more we start thinking about the cultural change and the implications of technology implementation, I think the better off organizations would be. So I think it's a little of both, it's 50/50 in my opinion.
Stephen Lowisz: What do you say to the company that says, “My entire business is based on relationships, that's why people use us. But our combined ratio is suffering. And we know we need automation, but we’re all based on relationships.” How do you end that that loop?
Kartik Sakthivel: And there's no reason why relationships need to take a backseat to automation, right? So when we talk about automation, we're talking about automating some, again, the rote manual operational things. That's where I would start and see where it makes sense. The more time we can return, we can free up as organizations, to be able to deploy our associates to add some of the more higher level thought leadership value add, right? I think that's a win-win for everybody. Look, we talked about the transmodal generation. I can guarantee you that your kid, your son, Stephen, in the next 20 years… when he gets his first job, he will not be looking to do some of the manual, automated operational things we do today. He's like, that's not my bag. I don't know what you call that, Generation Z or Z-A, [but tasks] like an Excel spreadsheet. But they will be reticent on undertaking some of those rote operational things. So, I think it's extremely important that organizations realize you don't have to cede the quality of relationships due to automation? I think it's important, I think we can do both. It's not a binary, it’s not on or off.
Stephen Lowisz: So same question for you, Kartik. And then Pete, I'd like to go to you as well. Kartik, can you give an example of an automation that maybe was rolled out properly and what that looks like? And then conversely, one that wasn't rolled out properly? And really what those differences are?
Kartik Sakthivel: Yeah, so I've had the good fortune of working across industries, industry verticals, and companies as well, big and small, right? Anytime when automation initiatives succeed, it's because you have involved, you build that groundswell, right, you painted the picture. And you build champions along the entirety of the value chain. So from senior executives, all the way to middle management all the way to the people who formerly used to be pushing buttons, and now they don't have to anymore. We worked on automation initiatives that that have freed up 45 days of somebody's capacity. 45 days of a human being to FTE is an incredible amount of things for us to redeploy, right?
And, like automation can… you know, we think about deploying automation as these massive things, and they can be. But like, you can start small right? You can start by even the most smallest of the things that most organizations undertake, in terms of automation. So there are hundreds of examples that companies do, all day, every day, in terms of making incremental progress towards automation.
I think one of the examples in the life insurance industry today that is vastly popular is automated and accelerated underwriting programs. I think, across the industry, these programs are getting a lot more ubiquitous, because let's be honest, right? And the pandemic has proven it. Culturally, people are reticent on doing pyramids, right? You don't want to draw your blood, you don't want to be in a car, you don't want to go see a nurse, you want to be able to procure life insurance without going through all of those things. All those things are important. Don't get me wrong. But the more you can automate some of the more simple things, it frees you up and your workforce to focus on the on the higher level things when things go bad, Stephen, or things don't reach their desired outcome… It’s like I said, first, you don't build consensus across the value chain, right? Two, you have a disjointed experience across the value chain?
The work we did with McKinsey last year, you know, we talked about hyper personalization and customer experience. But we also realized that the process industries do one thing really well. We digitize in silos, right? So when we talk about insurance will digitize claims, it will digitize underwriting, it will digitize actuarial… but how about digitization across the value chain? You don't want to be in a scenario where your claims and your underwriting systems are circa 2020, but your actuarial or your billing systems are circa 1989. Right? So you can't necessarily automate across the across the value chain, so that that's where things get a lot squishier.
Stephen Lowisz: Sure. So Debanshu, I see your question, I'm gonna circle back to that in one second here. Pete, you’re over at A&M, you guys work with a lot of different companies and a lot of different industries. I think you'll probably have a unique perspective. What's your take on what a successful rollout looks like versus a negative rollout?
Participant: That's a great question. I mean, I think I can give you a couple examples of successful ones. And then, where I've seen things fail and how we've helped advise clients on that.
So I think, a real successful one, which was an IT one, even though was for an insurance company, AIG. At AIG, we did a lot of work with them in the IT department, for their CTO, automating service management. So if you imagine, PC goes down, issue goes down, there's a lot of use cases out there around service management. We were able to take, I think, eight bots and train them to do the vast majority of research that engineers were doing, and return several 10s of 1000s of hours of time to those engineers who were then just looking at the exception cases, to some extent, to Kartik’s example.
You know, they didn't get rid of any engineers. What they were able to do is handle a much larger capacity of tickets and have the research presented to the engineer, as it was being done by the bot. It would do all the research and figure out, do you need to flip a switch? Do you need to restart a server? So that's an example of one that worked well.
We've done work in the in the mortgage processing industry, you know, mortgage brokers or mortgage processing is another big example. We've done a lot of work successfully in revenue cycle in the healthcare industry, because revenue cycle is a very, to Kartik’s point, it's a rote thing. You're going out to insurance companies, and you're asking them to authorize a claim, maybe pre authorize it? And if not, how do you handle the ramifications? Who do you take it to? And that's a lot of that is just emails and phone calls that can be handled by a bot.
So those are examples of where it's done well, because there are very, very straightforward use cases to apply it. And it can be applied at a functional level where I've seen a lot of these initiatives fail. And a lot of times when I go in and meet with a CIO or CFO and say, “Well, what are you doing in automation?” And this is mostly pre COVID. Although I think there's still examples during COVID, because I agree, COVID has accelerated dramatically. See CEOs and CFOs agreement with the CIO to say, “Let’s try it, let's experiment with this, let's try and put things in place to reduce friction and close the gap where we might not have a human to do it. Put in some automation to do it.”
But where I think it fails a lot of times is the lack of thinking more broadly, more enterprise level. And I go into companies all the time, and I'll find out that the CFO bought a Blue Prism Bot, and automated three functions in finance, and then could never convince anybody else, because he was paying for it, or she was paying for it. And wasn't in a Center of Excellence. That was a more enterprise level. They weren't evangelizing.
And then the CIOs got three UiPath Bots, or some Automation Anywhere ones in the call center, you know, and it kind of becomes this… not to say that you can't have a disparate, you know… each different bots have different skill sets. But automation, in many cases, has been done as an experiment. And when you do it as an experiment, as opposed to thinking about it, I always use the phrase, “Think big, start small, deliver quickly.” If you think about it, at more of a strategic level, say, “What could this become? And how do we incubate it properly by seconding a team. Maybe it's in the transformation office, maybe it's with the CFO, I've seen it done different ways. Have a small Center of Excellence where they become evangelists and understand it, and then federate those ideas out to the different departments and help them pick. What's the right type of automation for us to use here, how do we go ahead and take this particular business process? Or maybe cross departmental process, and look for ways to automate it.
And I think process mining tools that are out there now are helping to bridge those gaps because they can bridge it across multiple systems. But again, unless you're looking at it from an enterprise level, and then saying, okay, where are the best ROI value use cases that we can apply? And then let's prioritize a portfolio of future opportunities and put those in place. It often just literally never gets out of the department. It's never gets beyond a kind of… I call them kind of stranded employees, right? You get this digital worker, it's kind of stranded there. It's like doing six hours a day of work in finance, never really reaching its full potential. And then you've got, you know, other ones in other areas. So that makes sense.
Stephen Lowisz: Yeah. appreciate the feedback. And again, if any of you guys have questions, by all means, bring them up. But Debanshu, you put a question in the chat, and I think this is for Kartik here. “Due to the regulations in insurance, do you think there's a limit to the success of automation compared to maybe some other industries?”
Participant: Yeah. Let me clarify that question. First, in the insurance world, as we know, that there are products that are driven by state insurance regulation, right. And when you look at insurance processes, whether it is underwriting claims or any other processes, you know. It is very hard to find a significant volume of transactions that can be categorized as unique profits, because of the variation cost of being introduced and been changing, and it becomes a nightmare to, you know, maintain it. And, if we think from a rolling out – and you mentioned this Peter – one of the challenges… you know, many of these technologies are purchased at the IP technology level, and they try to evangelize them, which never materializes because you're almost trying to find their problem to fit the solution that you already have, which is not the right way to do it. And as a result, from every business unit, tries to justify that investment from their P&L standpoint, and they cannot justify it because they do not have enough volume of transaction to automate. So as an enterprise level you can justify, but to get to that the journey may take two, three years, and nobody wants to be willing to spend that much money at the enterprise level to justify each P&L investment. So do you think that that problem in insurance, such as finding enough volume of transaction, is a challenge to be successful with automation at a mass level in larger companies, you know, like AIG, or any other company? 26:43
Kartik Sakthivel: I believe so a couple of things, I think - you know my fear is that CIOs across the insurance industry landscape have been vastly successful in a couple of things. Number one - looking at our roles, not as technology leaders first, but looking at our roles as business leaders who specialize in technology. I also think the second point I would make as IT especially in the US central organizations like CEOs or CTOs - 0r those organizations have the honor and pleasure of getting a 360 Vista perspective across a company's landscape, right? So, if they are with larger organizations, as we know, things can end up happening at a divisional level at a department level in terms of digitization, be it automation, or an upgrade or anything else. I think technology leaders have been extremely effective at looking across the landscape across these divisions and getting that 360-degree perspective, connecting the dots, bringing the socializing, and neutralizing the problem that is happening within a particular organization. So how do you achieve enterprise scale? Just like that - you can connect dots on stuff that is happening in claims, opportunities and underwriting, opportunities in finance - bring these together and put them together in a coaching package. Then the ROI derivation is one of the things that from a from a business unit head perspective everybody is in it for the same reason. You cited AIG last year, everybody is in it for the success of AIG in totality, not one aspect or one facet of the organization. That is true for most Insurance companies. 28:49
Stephen Lowisz: Awesome. But again, feel free to chime in anyone and everyone. I'll keep us somewhat on track, but feel free to throw any relevant questions out. You know, going back to Pete for just a second here, what do you think is more applicable with the customers that you speak with? Specifically pertaining to their workforce - Is it a positive outlook on automation? And this is going to take off the BS work off my plate? Or what are you trying to do, automate me out of a job? 29:16
Participant: Well we scare people when we come in anyway, because A&M has a reputations of restructuring firms. So when we come in the building typically I talk to a CFO and I say - have you heard of us? And if he says, yes - I'm worried because that means he either lost his job or we restructured him out of it. It used to be the case now we are much more associated with performance improvement and advisory. More like the McKinsey's and the BCGS, in the veins of the world, then AlixPartners as an example. I only focus on growth companies yellow to green in terms of health. But I think that it's a double-edged sword. Part of the reason that we are doing this is to improve efficiency and take hours and headcount out of the equation right now, the internal story that HR or it, or whoever will, will say is, well, gosh, we can leverage our resources differently. And, and often, it does not involve eliminating heads.
But when CFOs hire us to come in, and they say, look I want you to make my process more efficient. It's not because they want to continue to pay the exact same amount that they're paying for their team. It's because they want to be able to process invoices at a lower cost, and maybe eliminate three or four people out of the department that they might have, or in a call center, or whatever it may be. So I would say the majority of these end up where employees are not your jobs are not taken out. And we certainly don't go in with the position that we're here to take jobs out, we're there to look at what can be done to take some of these mundane steps out.
I think, if anything, what it’s allowing companies to do is reclaim jobs that have been sent over to India, because they can teach a bot to do things more efficiently and work with employees here in the US, rather than to have to send it three time zones away, and have it done at night. I think that the companies that have been the most adapt at leveraging bots have been the outsourcers, the business process, outsourcing the shared service companies, and the firms in India that are already leveraging it. They are disintermediating their own people, by leveraging automation in the areas of revenue cycle and other things. So, I think the answer is a complex one, but that you are going to position where you shouldn't be eliminating workers, but look for efficiencies, and ways to redeploy those workers to soften your way in into doing it right. When private equity hires us. It's not to figure out a way to reuse workers, it's to get me 10 million of EBIT out of this company and figure out how to do it right. So that I can get a 10x return on that when I sell the company in three years. Unfortunately, that's the case, and that's where automation can certainly help with that. 32:32
Participant: So just if I can jump in, for a company using a shared services model, what are your thoughts about bots crossing environments? Does that cause you concern from the internal company environment to the outsource environment?
Participant: Meaning like an outsourced shared service of like a Genpact or something like that?
Participant: Yes. So let's say that, you know, the setup services for new submission activities outside the organization, but obviously delivering network product back to our environment, a bot could end up crossing environments.
Participant: Yeah, we've actually worked with outsource providers. I think one of our most successful RPA implementations with Cisco foods, where we use Gen pack as our finance transformation outsourcer. But they did it. I think your contract should be structured in a way where you're not in a multi tenant environment as it relates to those. And we're on a Roots Automation call. I think one of the amazing things that I love about Roots Automation is the fact that you get the collective knowledge of these bots. But collective knowledge is not the same as having the same bot use working on a USA transaction, or an ally transaction or an AIG transaction in finance, kind of back to back to back.
I think you still need to those digital workers to be isolated, even though their collective memory and experience. These this generation of bots, know how to use SAP, or they know how to use Salesforce, or they know how to use ServiceNow as an example. So and that's because they've been taught, as opposed to three years ago, you would buy a bot, whether it was at the server or the attended level, and you'd have to teach the bot everything right in your environment. You don't have to do that anymore. But I think you should make sure, and things like the advent of data privacy agreements, and some of these other agreements that are getting put in place, are preventing vendors from being able to leverage, accidentally or on purpose, a bot in a multi tenant environment where there could be a commingling of those transactions. So separating the processing of the data with the with the intelligence of the bot, I think is where there's a difference there if that makes sense.
Participant: Yes, thank you very much. Yep.
Stephen Lowisz: So Kartik, back to putting you on the hot seat. Oh, and by the way – I said that Austin and I wouldn't pitch Roots. But if any of you want to, I'm more than happy to hear it. We are hiring in Sales, Pete. So Kartik going back to you. So, the market perception of insurance is like the only thing worse than big insurance is big banks, right? That's often the perception. How do you convince a workforce that, yes, we are using it. We are implementing automation. No, we are not coming for your job. And it's not a sneaky ploy to eventually phase you out. How do you tackle that?
Kartik Sakthivel: Yeah, thank you. So, first off, in insurance and specifically life insurance, we are protecting American families and providing for a sound financial future for them. So I know the general perception. But I want to say from an insurance industry perspective, I think it's a noble profession.
But to answer your question directly, I think it's important to make sure that you engage your workforce and engage your employees in the journey in the process. Automation is not something that you bring in as a cog or a machine and just go ‘plunk’ and hand people off one day, right? They have to be part of the journey. I fundamentally believe that regardless of what function of insurance or insurance company that you serve in, whether you've been in your role for a year, or for 50 years, you have a significant amount of intellectual capital that is baked into you, either by virtue of doing the same job day in and day out for a year or 250 years. I think how you harvest that intellectual capital, and help the workforce transform your own organization is the linchpin of any automation journey.
So that's number one. Number two, you have to paint the bigger picture. People are smart people, right? Like we have smart people across financial services and insurance. You have to paint the bigger picture on where you're going. Not because people know where you are, right? Where you're going, why you're going there, and how they can help. And most importantly, what's in it for them. “What's in it for me? How can I help in being a Change Catalyst for my organization? And ultimately, what am I as Joe Employee going to get back as a result of my investment in helping us propel our organization forward?”
Stephen Lowisz: Love it. What would you say are the components at a high level to a proper change management strategy? You mentioned the word consensus earlier, that certainly needs to be a part of it. But what are those first steps that you would take and what are those main components?
Kartik Sakthivel: Yeah, so look, a couple of things. I think change management requires leadership, right? It speaks to the value, quality, and efficacy of an organizational leadership. As much as it starts top down. It has to start top down and needs to be champion top down. It has to be championed by every tier of the organization. So change management is the toughest things to organize. But it's also an opportunity to go back to basics, right? So I don't know if you're familiar with ad guard. It's a change management framework. So awareness, desire, knowledge, agility and reinforcement, right? So making sure that you're evangelizing essentially, the principles of Ad Guard, what's in it for the workforce, how they can help be the change champions, their ability and capability to drive that change.
And then at the end of the day, it's reinforcement, right? Continual reinforcement change isn't a one and done thing, right? It needs to be learned. It's easy to want change. But it's not easy to change. So I think it's the leadership principle of driving that change, and then having the entire workforce support it.
Stephen Lowisz: Sure, Debanshu, do you want to ask your question?
Participant: Oh, sure. So my question to you is, as I said, it is a follow up to our previous conversation around justifying the ROI for an automation initiative in an insurance world. I feel like… do you think it would be – and I don't know how much of this is going on – where actually the automation vendors are partnering with business process, software vendors, like say, Guidewire, who are the leaders in the domain, to provide out of the box automation solution, which can become a quick ROI? When do you see that happening more often, rather than this, trying to go into an insurance business? I'm trying to build it up from scratch, or, you know, do you think that is happening?
Kartik Sakthivel: So my HR answer is going to be “It depends,” right? And it depends on the implementation and use case. So I'll give you an example. You cited guidewire. So you have a billing system. Right now, the work we did with McKinsey revealed that most carriers billing systems were built around the 1990s. So the opportunity right there, it's an orchard of low hanging fruit, right. So what happens with these legacy systems? Is that by the word itself, its legacy, right? You know, on one hand, there is the fragility, the brittleness, the challenge to manage secure operations, to continue maintaining them. But on the other hand, it's also the business processes around these legacy systems to get work done, right, and work around them as they become institutionalized as part of these all these systems.
And replacing that legacy system with a Guidewire billing center, for example. It's not pretty straightforward. I don't mean to make light of it. But where the complexity kicks in is unwinding all of those business processes that have been so tightly coupled around your product line. And in this case, it's the billing system. So as soon as you do that, though, you're effectively automating all of the stuff that people used to do, right? So you get out of the box automation.
The second facet of your question is some of the more grassroots automation where it's not a one and done. So you can take a billing center, you can take a Policy Center, you can take a clean center, and just fullscale replace a function of insurance with a product. Because even those systems have to integrate within the tapestry of an entire insurance company's ecosystem. So I think the ecosystem, the universe is large enough for as you mentioned, companies, such as Guidewire, to out of the box automate some of these manual things that have been institutionalized, as well as for automation organizations to tackle the broad swath of things that these won't tackle out of the box. If that makes sense.
Yeah, that makes absolute sense. And I think it comes I also found that a lot of times automation becomes difficult in forced issues, especially on new business even sometimes, service a is because the way the company is selling the product, if you are customizing your product configuration to a degree that you are trying to get to the niche customer bases all over the place, guess what, it will increase your cost of operations and sometimes they build those new target customer audience and product configurations without understanding how it is going to impact your downstream operations. All right, because they're all focused on increasing the sales. And I feel like that's that's the challenge that's constantly being faced with the operation side that they're, they're blindsided.
Participant: Yep. Agreed. In a utopian world, some of these legacy things we're dealing with, you know, things that we did 15, 20, or 25 years ago. Like, all that stuff. That was a little unusual and unorthodox, when we were young, right, I was a rambunctious teenager. So I get it, I get how we evolved to where we are, again, though, it's just an opportunity, right? It's an opportunity to pay down the scope of technical debt, right, a Mount Everest worth of technical debt, and then start building for the future at the same time.
Stephen Lowisz: Awesome, love the questions. Again, feel free to keep them coming everybody. Question for Bob Gilpin. How can you tell if employees are engaged with their work? And how, as a company, do you measure, essentially an attitude of engagement?
Participant: You know, very simply, you can ask, right? I mean, communicating with employees is a pretty novel idea. And I don't think it's something that everybody does. But obviously, measuring results, that's probably the first thing to do, you can measure results of your employees to see how they compare to others, especially when they're in similar disciplines doing similar jobs. Just ask them. And also, we have a process where we ask customers, so our agency partners and our customers to get feedback, and you can tell if your employees are engaged based on what they're telling you. You know, thankfully, we're pretty lucky in that we get relatively good, regular, consistent feedback. And when something isn't working, well, they're pretty quick to point it out, and we react accordingly.
Stephen Lowisz: Do you use engagement surveys, NPS scores, anything like that?
Participant: You know, if you take a step back, the way we really look at it is firstly, we want to make sure that we are what is considered an ‘employer of choice.’ So that's part of everything we do. So that's kind of built into the culture, it's built into our strategic business plan. It's built into our training, how we regularly interact, recognition, performance reviews, all of those items. And so, first and foremost, we need to make sure that we're an employer of choice.
Then, as I mentioned, regular communication: we have a quarterly employee meeting, regular department meetings, and then, to what you just asked, we do pulse surveys every month. So whatever that hot topic is, we'll send out a pulse survey to our employees, get their feedback, and again, react accordingly. And then ultimately, if… thankfully, we have a well below average turnover rate… but in the exit interview, if someone decides to leave and move on, we do ask very probing questions about engagement, about attitude, about satisfaction, and we use that as a good feedback mechanism as well.
Stephen Lowisz: No question from anybody on here. Kartik, especially curious to hear if this is applicable to you. But have any of you run a specific NPS or engagement survey initiative, both right before and then shortly after an automation implementation to actually see the direct results of that automation? And if there's crickets here, I'll move on. But I am curious to hear if anyone has that experience in insurance or elsewhere.
Participant: I can say in general, Stephen, we did a survey a while back, a pretty comprehensive survey. And we did identify a lot of needs in our in our technology area. And this was about two years ago. And we based several of our current initiatives on that feedback. You know, unfortunately, our CIO would probably say this, we probably found more needs in that area than any other area. And you know, that quickly elevated to the top of our priority list. And it's been very helpful and engaging and getting some new technologies on board.
Participant: Yeah, I just want to I just want to add, I think there is always a challenge in doing those kinds of surveys, because how do you attribute the app service results to the specific automation initiative? Because in most cases, there are multiple initiatives that are going on in a particular business function that are criss-crossing from a benefit standpoint, right. So when you get those survey results, how much of it is attributed to the automation? It's a difficult problem, in a way, to find that out.
Stephen Lowisz: So, next question for you, Kartik. So, let's say you convince your workforce Okay, we need to automate everybody's on board. You have consensus. Where do you start? Like, how do you decide, okay, this is a priority over here. But that may not be over there. Is it simply based on FTP capacity created? Or are there other measurements? Or just depends on the company?
Kartik Sakthivel: I think it depends on the company and the use case, right? Every company has to go through some level of difficult prioritization exercises, our tendency is to want to do it all right, but that's just not reality. You're gonna burn great people out. I think trying to stack rank and prioritize these automation initiatives, all depends on where the opportunity is, and the company's business direction? What's your vision of the next three years, right? What are the most important things that we want to automate? Your engagement from your website, you want bots to be able to communicate with your prospective customers. So you can take some of the things off of your actual customer service reps plates, right? And then focus that on the website. If that's your priority, that's awesome, right? If you have, I don't know, three FDA years and accounting, for example, and all they're doing right now is their work on Excel spreadsheets. Chronicle released 17 different disparate systems. Maybe that's your priority, but I think there's no, there's no right or wrong answer. It will be greatly predicated by business priority and depends on the company itself.
Stephen Lowisz: Sure. So last couple of questions for you Kartik. So the first one is, what is the worst mistake that you tend to see companies make when thinking about more advanced automation, right? Not simple, quick RPA, or if-then statements to automate the really, really mundane. But as they start to get more advanced, what are some of the mistakes that you see organizations making?
Kartik Sakthivel: Yeah, got a couple of things. Number one, I think we touched upon it in our previous segment around NPS scores and how we are seeing the rewards at the automation initiatives. And it was a fascinating conversation for a couple of reasons. Look, by and large, anytime you implement digitization, from an employee perspective, based on survey feedback that you got prior, you will see a direct correlation increase in in their scores, right. I agree with Debanshu, that it's difficult to pinpoint the root.
And those are points in time, right. So it's difficult to pinpoint the root of those. But there is a correlation there. I think the biggest challenges that come in, when we implement big honking automation initiatives, is like we talked about right? Is without employee active participation and engagement, managing the change curve. Look, automation itself, the technology stuff is predictable, right? It's ones and zeros. And until we get quantum computing in place, it's still going to be ones and zeros. So I think it's a little bit predictable, I write bad code, I'm gonna have a bad result.
But, you know, it's the human aspect of it. It's the change management and engaging people and bringing them along with you for the ride, rather than implementing something and just saying “figure it out.” I think that's where the problems start.
The second thing I will add is impact analysis. Look, most insurance companies are large, complex machinery. It's sophisticated, large, complex machinery. But it's complex in terms of its interconnections, and how things are synaptic and connected with each other. If you don't do our level of effort and focus on downstream impact analysis, you might make changes on automate one part of your value chain, but you might actually, by transference, create a problem somewhere else. So otherwise, he's doing whack a mole all the time. So I think understanding the totality and the bigger picture, starting with that end in sight of what it is that you're trying to achieve to get your business objectives, and then working backwards, is probably where we're our best bets on.
Stephen Lowisz: I love it. Now, Debanshu, I'll give you my last question, then. Do you want to ask him the question that you just sent me?
Participant: Okay. So the question is, as you know, we outsource to BPOs all the mundane processes, but we hear tremendous challenges in places like India or Malaysia, Philippines, wherever you say. They are having hard time retaining people, because these people sometimes quit job after accepting the job before even taking the job. So they're having a hard time retaining people. Do you see any role for automation in doing the training quickly to the people who are only there for a short amount of time and have some kind of on demand job, to deal with that challenge?
Kartik Sakthivel: So that's a good question. So you know, when I hear these stories as well, right? From a BPO point of view, it's hard to. And I had the pleasure of visiting… I forget what it’s called. So they have a whole digital city where all these deals are clustered. And it's fascinating because your talking about 10s of 1000s of thought leadership, really highly skilled workers go have a day meeting together at McDonald's or whatever else. So the competition for talent is extremely, extremely strong. To me, when I hear the stories of that, I just get heartened, because the VPs are serving American companies and other global companies. What, 75% of the world's BPO activity happens in India? With what other stuff in the Philippines, right? So, I get heartened, when I hear it just speaks to the vibrancy of the American economy, when I hear there is a significant price competition or down competition in India, whether they can use bots or automation to quickly train your workers.
Definitely right, there's a huge opportunity for us to be able to leverage automation throughout the value chain, including within a BPO organization. And I give these organizations a lot of credit too, right, because they are working with their American clients, because they're working with the Europeans. Now, they have their finger on the pulse of not just what's happening in one region, but a finger on the pulse of what's happening globally. And I think they can bring those best practices to bear, see trends and patterns emerge, and then say, “Hey, you know what, we need this particular type of work.” Or the future that they're probably operating in, like a retail cycle where you're projecting out styles for fashion two years down the line three years down the line, and then working backwards. But yeah, I think turnover, as disruptive as it is for us as clients of those organizations can be. I think it speaks to the vibrancy of the economy. But yeah, to quickly onboard and train. There's huge opportunities, and I think most organizations are already pursuing those.
Stephen Lowisz: Wonderful, man, and we have like two minutes to spare. That's perfect timing. Couldn't have planned that much better. First of all, any other comments, questions, or thoughts for Kartik?
Really appreciate everyone taking the time again, for Automation Trends Roundtable three. Number four is going to be in June. We have the CHRO at SCOR, one of the world's largest reinsurers joining to kind of host this with me for the month of June, I think it's on the 15th. But check out our website and we would love to have all you guys. But again, want to make a point of saying thank you. I know it's not easy to take an hour out of your day. I certainly hope you got a lot out of it. There will be an email coming your way with a one or two question survey so we can constantly make these better. I really appreciate all of you guys filling it out. Hopefully, all of you can. But again, thank you all and enjoy the rest of your Tuesday.